NAICS 332710 Quarterly Industry Report
Machine Shops
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 332710Sector: 33Updated: Q1 2026
About This Report
This report on Machine Shops (NAICS 332710) draws on official Census Bureau[6] 2022 NAICS classification data, Bureau of Labor Statistics[7] occupational employment statistics, and U.S. Small Business Administration guidance on size standards and loan eligibility. Fair Market Value compiles industry data from verified government sources to provide authoritative benchmarks for business owners, CPAs, valuation professionals, and lenders assessing machine shop establishments. Data is updated quarterly as new Census and BLS releases become available. NAICS 332710 classification encompasses custom precision machining operations central to U.S. manufacturing supply chains.
Industry Snapshot
Key metrics for the machine shops industry.
Industry Definition & Overview
Machine Shops (NAICS 332710) encompasses establishments primarily engaged in machining metal, plastic, and composite parts on a job or order basis. These shops use precision machine tools such as lathes (including computer numerically controlled), automatic screw machines, and equipment for boring, grinding, milling, and additive manufacturing to produce custom components for diverse industries.
Machine shops serve as a critical link in manufacturing supply chains, providing custom-machined parts to aerospace, automotive, medical device, electronics, and industrial equipment manufacturers. Work typically occurs on a contract basis without the shop owning the finished products. According to the National Tooling and Machining Association (NTMA)[5], the U.S. precision machining industry represents approximately $40 billion in annual economic activity.
Shops range from single-person operations to companies with over 100 employees, with the typical shop employing about 15 workers. The industry is highly fragmented and concentrated in the Midwest, particularly in states like Michigan, Indiana, Wisconsin, and Ohio. Tight tolerances and rapid turnaround define competitive advantage. Capital investment in CNC equipment, quality systems, and skilled labor remains the primary barrier to entry and driver of profitability. Quality certifications like ISO 9001 and AS9100 differentiate shops competing for aerospace and defense contracts. Material costs, particularly steel and aluminum pricing, directly affect shop margins and pricing structures.
What's Included in This Industry
- CNC milling and turning operations for metal and plastic parts
- Precision turning on lathes and rotary equipment
- Boring, grinding, drilling, and reaming services
- Electrochemical and electrical discharge machining (EDM)
- Waterjet and laser cutting and machining services
- Additive manufacturing and 3D printing services
- Chemical milling job shop services
- Custom tool and fixture manufacturing
- Precision component fabrication from customer-supplied specifications
- Quality assurance and inspection of machined parts
- Job and order-based machining for low-volume production
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Subsector | Fabricated Metal Product Manufacturing | 332 |
| Industry Group | Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing | 3327 |
| NAICS Industry | Machine Shops | 33271 |
| National Industry | Machine Shops | 332710 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 332721 | Precision Turned Product Manufacturing | Precision Turned Product Manufacturing differs from general machine shops by focusing on high-volume production of turned components using automatic screw machines and rotary transfer equipment, whereas machine shops (332710) handle low-volume custom work across multiple machining processes. |
| 332722 | Bolt, Nut, Screw, Rivet, and Washer Manufacturing | Bolt, Nut, and Screw Manufacturing specializes in fastener production through dedicated header and forming machinery, while machine shops provide custom machining services across diverse materials and applications on a job basis. |
| 332811 | Metal Heat Treating | Metal Coating, Engraving, and Heat Treating involves finishing and surface treatment processes rather than material removal, whereas machine shops remove material through cutting, grinding, boring, and milling to achieve precision specifications. |
| 332119 | Metal Crown, Closure, and Other Metal Stamping (except Automotive) | Metal Crown, Closure, and Other Metal Stamping involves forming metal through stamping and pressing processes rather than material removal, differing from machine shops which achieve precision through cutting and grinding operations. |
| 332311 | Prefabricated Metal Building and Component Manufacturing | Prefabricated Metal Building and Component Manufacturing produces standardized products through repetitive processes, contrasting with machine shops which focus on custom, low-volume precision work to individual customer specifications. |
| 333515 | Cutting Tool and Machine Tool Accessory Manufacturing | Cutting Tool and Machine Tool Accessory Manufacturing produces the tooling and accessories that machine shops consume in their operations, representing an upstream supplier relationship rather than a competing manufacturing classification. |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 12.9% | 2,257 |
| 2 | Texas | 7.6% | 1,326 |
| 3 | Ohio | 6.5% | 1,141 |
| 4 | Michigan | 5.3% | 926 |
| 5 | Pennsylvania | 5.3% | 925 |
| 6 | Illinois | 4.9% | 858 |
| 7 | Wisconsin | 3.9% | 680 |
| 8 | Indiana | 3.3% | 583 |
| 9 | New York | 3.3% | 581 |
| 10 | Minnesota | 3.0% | 529 |
% Of Establishments
0%
13%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
1,448
Total SBA Loans
$1.2B
Total Loan Volume
$804K
Average Loan Size
11 yrs
Average Loan Term
9.62%
Average Interest Rate
14,128
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: The U.S. Small Business Administration classifies machine shops under NAICS 332710 with a size standard of 500 employees[8]. SBA 7(a) loans[9] and 504 loans[10] provide financing for equipment, working capital, and real estate. The 504 loan program is particularly suited for major capital equipment investments with fixed-rate, long-term structures. Machine shops qualify for government contracting opportunities and prime contracts when they do not exceed the 500-employee threshold.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | U.S. Bank, National Association | 104 | $83.0M | $798K |
| 2 | The Huntington National Bank | 152 | $69.6M | $458K |
| 3 | First Financial Bank | 32 | $59.7M | $1.9M |
| 4 | Truliant FCU | 32 | $45.7M | $1.4M |
| 5 | 1st Source Bank | 8 | $40.0M | $5.0M |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified as machine shops?
Machine shops (NAICS 332710) include contract manufacturers that specialize in precision machining of metal, plastic, and composite materials. They range from independent one-person shops to mid-sized companies with dozens of employees. Common types include general job shops accepting any machining work, specialized shops serving particular industries (aerospace, medical, automotive), and shops heavily invested in CNC automation. Per NTMA[5], member companies engage in the design and manufacture of special tools, dies, jigs, fixtures, gauges, and precision-machined parts.
How is machine shop work structured operationally?
Machine shops operate on a contract or job-order basis, meaning customers specify the parts needed and the shop provides machining services without retaining ownership of finished products. Work typically involves receiving customer-supplied material or specifications, using precision machine tools to remove material and achieve required dimensions, performing quality inspection, and delivering completed parts. Most work involves low-volume production from prototype development to small batch orders.
What is the SBA size standard for machine shops?
The U.S. Small Business Administration[8] defines a small machine shop (NAICS 332710) as an establishment with 500 or fewer average full-time or part-time employees over the preceding 24 months. This count includes all persons on the payroll. Qualifying under this size standard makes shops eligible for SBA loan programs, government contracting opportunities, and set-aside contracts reserved for small businesses.
How does NAICS 332710 differ from related codes like Precision Turned Product Manufacturing?
NAICS 332710 (Machine Shops) covers custom, low-volume work using a variety of machine tools including milling, boring, grinding, turning, and additive manufacturing. NAICS 332721 (Precision Turned Product Manufacturing) focuses on high-volume production of turned components using specialized equipment like automatic screw machines and rotary transfer systems. Machine shops accept diverse projects requiring different processes, while precision turned manufacturers operate dedicated production lines for specific component types.
What industries depend on machine shop services?
Machine shops serve as suppliers to aerospace, automotive, medical device, electronics, defense, heavy equipment, and industrial machinery industries. Aerospace customers require AS9100-certified shops producing landing gear, engine housings, and structural components. Automotive OEMs source engine blocks, transmission housings, and suspension components. Medical device manufacturers depend on shops for surgical instruments and implantable component housings. Per Bureau of Labor Statistics data[7], machinists work across most manufacturing subsectors.
What specific activities and services are included in machine shop classification?
Activities in NAICS 332710 include CNC milling and turning, precision lathing, boring and drilling, grinding, reaming, EDM (electrical discharge machining), waterjet and laser cutting, additive manufacturing, chemical milling, custom tool and fixture manufacturing, and quality inspection. Shops may also offer secondary operations such as deburring and surface treatments. Excluded from this classification are forging, stamping, and casting operations, which are classified separately under other NAICS codes.
Are machine shops eligible for SBA loan programs?
Yes, machine shops qualifying as small businesses under the 500-employee threshold are eligible for SBA 7(a) loans[9] and SBA 504 loans[10]. SBA 7(a) loans provide up to $5 million for working capital, equipment purchases, debt refinancing, and real estate. SBA 504 loans offer long-term, fixed-rate financing for major capital equipment and facility improvements.
Where are machine shops geographically concentrated in the United States?
Machine shops are heavily concentrated in Midwest manufacturing states. According to Bureau of Labor Statistics data[7], the Midwest has the highest regional concentration of production occupations. Michigan, Indiana, Wisconsin, and Ohio maintain particular strength in precision metal manufacturing. This geographic clustering reflects the region's historical dominance in automotive, industrial equipment, and aerospace manufacturing, along with established vocational training pipelines.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]National Tooling and Machining Association (NTMA) ntma.org
- [6]Census Bureau census.gov
- [7]Bureau of Labor Statistics bls.gov
- [8]size standard of 500 employees sba.gov
- [9]7(a) loans sba.gov
- [10]504 loans sba.gov
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